According to the British “Financial Times” report, after the world ’s largest luxury goods group LVMH extended an olive branch to the US luxury jewelry brand Tiffany at the end of October and made a second bid, Tiffany invited Buffett to join for a better offer, but was rejected, Indirectly, LVMH has reached the largest acquisition since its establishment for $ 16.2 billion in just half a month and the largest acquisition in the luxury industry.
Buffett then confirmed the news. In his opinion, Tiffany, as a company with good long-term prospects, “has reached the sky-high,” and the premium for the direct acquisition of the company has been too high. It is worth noting that Buffett once regarded Tiffany as a potential acquisition target, and even bought $ 250 million of Tiffany bonds after the financial crisis to help the company survive the crisis.
In 2015, Buffett’s Berkshire Hathaway acquired Precision Castparts. Documents for the third quarter show that Berkshire Hathaway is currently sitting on a record $ 128.2 billion in cash without a significant increase in the repurchase program.
Last November, Berkshire Hathaway acquired Tech Data for $ 140 a share, but the highest bid was Apollo Global Management.
Also last year, Berkshire announced that it had invested $ 10 billion in the acquisition of Anadarko from Occidental Petroleum and that it was acquired at Apple, Bank of America, and Cola, Wells Fargo, American Express and Kraft Heinz hold a significant number of positions.
Buffett wrote in his 2018 annual report: “In recent years, the sensible path we should take is clear: Many stocks are bidding much higher than the price we can get through the overall acquisition of the business.” “The companies we invest in provide “It’s excellent value, far exceeding the value of the acquisition.”
Berkshire Hathaway’s stock has risen 11% in 2019, while the S & P 500 has returned 29%, which has led some investors to wonder why Buffett didn’t Put more money into the investment.